Livefyre Addressing The Native Ad Platform

Facebook and Twitter have been the social community meccas for many marketers and media companies alike.

But a growing group of companies, including Livefyre, RebelMouse and Mass Relevance, is trying to bring ownership of the social community back to their clients’ owned and operated properties as well as service the raging native ads and content marketing crazes.

In describing Livefyre, CEO Jordan Kretchmer said his company is building social community into every vein of communication, whether it's comments, live blogs, visualizations of trends, APIs that show off the hottest articles on a page or places that feature active users. That’s big data, social style.

Kretchmer explains that his platform has two sides – engagement and curation: “Our platform is expansive and has to do with engaging users within a client’s own content. But it is also aggregating social activity happening off of the client’s site and bringing it back in.” The latter is further enhanced by Livefyre’s September acquisition of Storify.

With 100% customer retention among 450 customers, according to Kretchmer, Livefyre is up to 90 people and claims “the fifth largest site network on the Web.”

AdExchanger spoke to Kretchmer about his company and industry trends.

AdExchanger: So when you say impressions on your network, do you mean paid views? Are you delivering ads?

JORDAN KRETCHMER: Impressions are related to how many streams are delivered via our platform into our customer's pages every month. And that means that users are seeing those streams. But, to answer your question -- do we have an ad network? No, we don't have an ad network, but we have a social native ad platform that allows our customers to integrate social data that's sponsored into their sites.

Do you consider your solution more of a marketing solution or a publishing solution?

It's both. We think the worlds are coming together. If you are not using social content for both marketing purposes and for publishing content on your own sites, then you're missing a huge piece of the puzzle.

How does Livefyre make money?

We are a subscription platform. So, our customers subscribe to us on anywhere between one- and three-year deals. But they're subscribing to different parts of our platform.

Some customers only want access to social data from Twitter, Facebook, YouTube and other sources -- and they want to stream that into their home page. You can do interesting visualizations of social data via Livefyre. Some customers just want that, some customers just want our core applications which is comments and live blogs and chats, and ways for you to engage your audience.

Most of our customers also want access to use our developer environments where they can create their own customized real-time applications using all of our other technology that exists.

Most customers are subscribing to our platform, which comes with all of those components on a yearly or multiyear basis. Our average contract value is $175,000, with contract sizes that range from $75,000 a year up to a million dollars.Our bookings are 2x year-over-year.

Can you provide a specific use case about how your native ads platform works?

Absolutely. About a year ago, brands like Chevrolet, Sony PlayStation and Blue Cross Blue Shield were starting to use Livefyre’s platform to aggregate all of the tweets, Instagram images and YouTube videos about their brands and pull them into their own sites. Like those companies, many other publishers and media companies are using our technology to display content, and we have brands and marketers who are using our technology to find and display content.

Separately, brands and marketers are spending billions of dollars a year on media, hundreds of millions of dollars a year in social media. But, they're doing that all on Facebook, for example, where you have this publisher base that has built in an audience. But we have 10 different publisher customers who are relevant to that certain audience. So if Sony PlayStation can come in and say, "We want to own social and do social marketing, and we want to do it not on Facebook, but rather where there are audiences of millions and millions of impressions already built in” -- since Livefyre technology is already there, we can deploy social content units that are a part of the article.

That’s a long explanation about how LiveFyre is trying to remove all of the buzzwords like paid, owned and earned. We take earned media, turn it into owned media and then we amplify that owned media by distributing it to our publisher base and the advertiser pays for that as paid media.

About the paid media, do you end up marking it as an “ad?”

We put in sponsor logos. A real-life example would be Sony PlayStation on IGN.com. IGN is a customer of Livefyre. So in between paragraph three and four of an article about the hottest games of the summer, PlayStation wants to put a content unit. That doesn't look like an ad unit, but that is a chart that is a real time feed of the trends of what are the hottest PlayStation games of the summer based on social media chatter. And underneath, it might be sponsored by PlayStation but the content itself is highly relevant to the article and placed as part of the article.

We are working on products right now that aren't programmatic, per se, but that are more automated in their deployment capabilities. We go through more of a manual process to deploy these because “hands-on” for a very high-tech approach works well for customers. Nobody does what we're doing here and it’s a very new kind of value proposition.

We are working right now on ways to make that more automated, where a brand can come in and say, "I want to spend a million dollars, and I want these target topics." Based on the sites that Livefyre has as customers, it will then ping the people on the other side -- the publishers -- about their inventory availability. But Livefyre will still be heavily involved in the creative process to make sure we're delivering highly valuable content to the pages.

I think there is no way that you can have a fully automated, but also highly productive and valuable, native ad content system. The whole point of native content is that there is human editorial control or creativity behind what makes it relevant. The more you have a program to programmatize that, the lower the quality and then, obviously, the lower the value of those programs become. For us, it is truly about automated deployment. We want to enable the creative mindset and editorial touch over everything that happens, but we don't want to spend nearly as much time as we have to today deploying the solutions once we create them.

It's about process efficiency and being able to deliver highly customized, creative, native campaigns that don't require the customer to do any work.